CapStar Financial Holdings, owner of Nashville-based CapStar Bank, has filed a lawsuit against investor Gaylon Lawrence and the Lawrence Group, claiming he made false securities filings and violated federal and state banking laws.

The violations were in connection to accumulating a greater than 10 percent stake in CapStar, according to the bank.

"CapStar is committed to protecting the interests of all of our shareholders and employees," said Claire Tucker, CEO of CapStar. "Our Board believes an important part of its fiduciary obligations is taking steps to enforce laws intended to protect our shareholders and other constituents. This is important to help ensure all shareholders have an equal opportunity to benefit from our strategic plan and any strategic initiatives."

CapStar Bank CEO Claire Tucker(Photo: Submitted)

CapStar claims Lawrence and the Lawrence Group failed to disclose plans to gain control of CapStar in filing disclosures, which violated the Securities Exchange Act of 1934. The defendants also violated a Tennessee law that requires an investor to be a bank holding company to buy 10 percent of a bank's voting stock, according to CapStar.

Jason West of the Lawrence Group said Lawrence did not violate banking laws and that the company consulted both the Federal Reserve and the Tennessee Department of Financial Institutions as it bought the shares.

“We had legal advice throughout the process," West said. "We are basically buying stock in a publicly traded company."

West said the Lawrence Group has not been in contact with CapStar leaders and would like to discuss the issue with them.

In August, the Nashville Business Journal reported Lawrence had gained a 6.2 percent stake in CapStar, and in September his stake increased to 8.2 percent. Lawrence is also part of the investment group that owns 1201 Demonbreun in The Gulch, where CapStar is headquartered.

"Gaylon continues to make investments in Nashville," West said. "He likes the market. We like CapStar Bank. We think it’s a good bank in Nashville and a good investment at the prices we bought."